1. POWER ON
TO OUR SHAREHOLDERS
When we combined MGM Grand, Inc.
and Mirage Resorts in May 2000
we knew this was the creation of a
powerhouse organization: the best
people with the best properties in
a dynamic industry.
J. Terrence Lanni
Chairman & Chief Executive Officer
2. BELLAGIO / LAS VEGAS TREASURE ISLAND / LAS VEGAS MGM GRAND / LAS VEGAS NEW YORK-NEW YORK / LAS VEGAS
In 2002, we posted record revenues and earnings.
POWERHOUSE Even though the year began in MGM MIRAGE was positioned major company properties will
an environment of uncertainty, to capitalize on this significant have converted to Ticket-In
Looking back on the second
MGM MIRAGE had a vibrant change in consumer behavior. Ticket-Out gaming technology
anniversary of the merger, it’s
12 months, setting records in Information technology may not that our customers have strongly
clear the integration of these
virtually every major financial be the most glamorous segment of indicated they prefer over handling
companies produced exactly the
and performance category. In our business, but done well, it can cash. This dovetails well with our
result we were aiming for: a
2002, we posted both record have a profound impact on finan- new Players Club which has the
streamlined powerhouse that, in
revenues and earnings, enabling cial results. Year-over-year, MGM competitive advantage of allowing
good times and bad, will deliver
us to improve our balance sheet MIRAGE properties posted, our customers to “trade-up”, if
on the promise of enhanced
through debt reduction, while collectively, a 38 percent gain in you will, to redeem points at any
opportunities for employees and
still reinvesting substantially in Internet bookings. of our resorts.
business partners as well as
our resorts and repurchasing our
robust returns for shareholders.
common stock. Another important component of MGM MIRAGE also embarked
our strategy is to stay a few steps upon an ambitious new development
2002 also ushered in an explosion ahead of consumer demand, and strategy. The multi-faceted approach
in travel industry e-commerce, and to that end, MGM MIRAGE includes construction of a new spa
marked more “firsts” for the tower at Bellagio as well as the creation
industry. By this summer, all of two new production shows and
buzz-generating new restaurants and
nightclubs at several of our properties.
The company is also aggressively
3. POWERFUL HIGHLIGHTS OF 2002
IN 2002, YOUR COMPANY POSTED THESE
POWERFUL RESULTS:
pursuing new jurisdiction opportuni-
RECORD SETTING NET REVENUE OF
ties as they develop in the northeastern
OVER $4.0 BILLION FOR THE YEAR;
United States and abroad.
RECORD SETTING EPS OF $1.83, UP
73% FROM 2001;
This all occurred in a year that
began with tremendous uncer- creative partners, we built or made
REDUCED DEBT BY $314 MILLION,
tainty, as the effects of the plans to develop several important
INCLUDING THE COMPANY’S $44 MILLION
SHARE OF DEBT REPAID BY MONTE CARLO; September 11 attacks still hung assets to provide a path for future
over the travel industry. We are earnings growth.
REPURCHASED 6.4 MILLION SHARES
most pleased to report that our
OF COMPANY COMMON STOCK FOR
business levels returned to almost With our colleagues at Boyd
$208 MILLION;
THE BORGATA / ATLANTIC CITY
normal during 2002, though we Gaming, work progressed nicely
INVESTED $295 MILLION OF CAPITAL IN
continue to work hard to enhance on Borgata, the first resort hotel
THE COMPANY’S PROPERTIES AND FOR
MGM MIRAGE has the great
revenues in all areas and at all of our to open in Atlantic City in more
DEVELOPMENT AND EXPANSION PROJECTS;
fortune of long-lasting partner-
resorts. These improved business levels than 13 years. We fully expect
ships with superstars such as
also allowed us to strengthen our the $1 billion Borgata will up
ENTERED INTO A REVISED DEVELOPMENT
AGREEMENT WITH THE CITY OF DETROIT Siegfried and Roy who in 2002
most important asset-our people-as the ante in Atlantic City when it
FOR DEVELOPMENT OF A PERMANENT
celebrated their 12th anniversary
we re-hired a substantial number of opens this summer.
CASINO COMPLEX;
of unsurpassed supremacy on the
employees previously affected by our
Las Vegas Strip.
response to the September 11 attacks. MGM MIRAGE has also bene-
COMPLETED THE SALE OF THE COMPANY’S
fited from numerous relationships
SOUTH AFRICA INTERESTS;
In 2002, we also laid plans for the
POWER SHARING with entertainment superstars who
IMPLEMENTED SEVERAL TECHNOLOGICAL
next generation of developments with
One of the hallmarks of any provide definition and personality
INITIATIVES DESIGNED TO ENHANCE BOTH
our partner of many years, Cirque
successful organization is its ability to our resorts. The formula for
REVENUES AND THE COMPANY’S INDUSTRY-
du Soleil. Both New York-New York
to empower others. Working successful entertainment is impos-
LEADING COST STRUCTURE, INCLUDING
PLAYERS CLUB AND IGT’S EZ-PAY(TM); and MGM Grand will debut new
closely with our financial and sible to duplicate.
ANNOUNCED TWO AGREEMENTS WITH
CIRQUE DU SOLEIL FOR NEW SHOWS AT
NEW YORK-NEW YORK AND MGM GRAND
LAS VEGAS;
ANNOUNCED A $375 MILLION EXPANSION BEAU RIVAGE / BILOXI MGM GRAND / DETROIT GOLDEN NUGGET / LAS VEGAS THE MIRAGE / LAS VEGAS
PROGRAM AT BELLAGIO, INCLUDING A
928-ROOM SPA TOWER AND ENHANCED
AND EXPANDED SPA, RETAIL, RESTAURANT
AND CONFERENCE OFFERINGS.
4. OUR COMMITMENT TO DIVERSITY
WHEN MGM MIRAGE LAUNCHED THE GAMING INDUSTRY’S
Our diversity initiative
FIRST VOLUNTARY DIVERSITY INITIATIVE IN 2000, WE
COMMITTED TO GREATER EFFORTS TO PURSUE DIVERSITY
AS A MORAL AND BUSINESS IMPERATIVE IN ALL ASPECTS
OF OUR COMPANY’S OPERATIONS. WE ALSO PLEDGED WE
productions created with the signa- diverse workforce and made signif-
WOULD BE ACCOUNTABLE AND
Anthony Gladney
ture Cirque genius, marking the third icant progress in reaching out to
REPORT ON OUR PROGRESS.
VP, National Diversity Relations
and fourth collaborations between assist minority contractors and
WE ARE PROUD TO REPORT DEMONSTRABLE ADVANCEMENTS IN THE STRATEGIC
our organizations. vendors looking to do business
AREAS OF EMPLOYMENT, PROCUREMENT, CONSTRUCTION, PHILANTHROPY, MARKETING
with MGM MIRAGE.
AND SALES, ADVERTISING AND COMMUNITY RELATIONS. WE COMMEND OUR EMPLOYEES
Restaurants, which have become
FOR THESE LAUDABLE GAINS. AS A DECLARATION OF ITS COMMITMENT TO
marketing tools unto themselves, Our industry-leading efforts are
DIVERSITY, IN 2002 THE MGM MIRAGE BOARD OF DIRECTORS CREATED A DIVERSITY
also saw powerful new names practiced throughout the ranks.
COMMITTEE. THE COMMITTEE’S PURPOSE IS TO ASSIST THE BOARD IN GUIDING THE
entering the Las Vegas marketplace Last year the MGM MIRAGE
DIVERSITY INITIATIVE AS A STRATEGIC BUSINESS IMPERATIVE, ENGAGING ALL
because of your company’s initia- Board of Directors demonstrated
ASPECTS OF THE COMPANY’S OPERATIONS.
tive. In 2002, Tom Colicchio, one leadership at the highest levels of
of the most respected and recog- our company by creating a
MGM MIRAGE’S COMMITMENT TO EXPANDING THE DIVERSITY INITIATIVE IS FOCUSED nized names in the New York Diversity Committee chaired by
ON CREATING A CULTURE THAT REFLECTS DIVERSITY AS A CORE VALUE: DIVERSITY dining scene, brought to the MGM Alexis Herman, former U.S.
IS WHO WE ARE, NOT JUST WHAT WE DO. WE BELIEVE THAT BY FOSTERING DIVERSITY Grand his celebrated Craftsteak. Secretary of Labor.
IN OUR EMPLOYEES AND MANAGEMENT, WE WILL ACHIEVE THE GREATEST TANGIBLE
EMPOWERMENT This is a critical element of our
BUSINESS RESULTS.
Our company’s power to be a Diversity Initiative for several
leader in the hospitality industry reasons. First, it elevates diversity
AS OF YEAR-END 2002, AN IMPRESSIVE 51.7% OF OUR WORKFORCE OF OVER
is derived, in no small measure, as a priority to the Board level;
43,000 WERE MINORITIES, UP FROM 50.5% THE YEAR PRIOR. BY THE END OF 2001,
from an awareness of our respon- second, the expertise on the
26.3% OF MANAGERS, DIRECTORS AND EXECUTIVES WITHIN OUR COMPANY WERE
sibilities to all our stakeholders committee is invaluable; and third,
MINORITIES. IN 2002, MINORITY REPRESENTATION IN OUR MANAGEMENT RANKS
and the communities in which the committee will assist the Board
HAD GROWN TO 28%. OVERALL, WHILE THIS IS REFLECTIVE OF THE AMERICA IN
we do business. in guiding the diversity initiative
WHICH WE DO BUSINESS, MGM MIRAGE STRIVES FOR
as a strategic business imperative.
IMPROVEMENT. THE MANAGEMENT ASSOCIATE PROGRAM,
2002 was a year in which the
SUPERVISORY PREPARATION TRAINING, LEADERSHIP
company continued its historic
TRAINING AND MENTORING PROGRAMS ARE ALL EXAMPLES record of employing a richly
OF APPROACHES DESIGNED TO HELP EMPLOYEES GROW
AND RISE TO THEIR FULLEST POTENTIAL.
Punam Mather
VP, Corporate Diversity & Community Affairs
5. is a strategic business imperative.
Another major initiative in 2002 was I am more excited today about the TABU / MGM GRAND
SIEGFRIED & ROY / THE MIRAGE
the launch of our MGM MIRAGE opportunities that lie ahead than at
Voice Foundation. The Voice any time in my 26 years in this
Foundation is a non-profit entity business. It is an honor to lead this
that disburses employee donations to company of 43,000 men and women
charitable organizations in Nevada, who have created a powerhouse that
Michigan and Mississippi. In 2002, will set the tempo in casino entertain-
employees contributed nearly ment for generations to come.
$2,300,000 to worthy causes and
organizations throughout the com-
munities in which we do business.
POWER ON
J. Terrence Lanni
While the current economic and
Chairman & Chief Executive Officer
global environment may be uncer- March 26, 2003
CRAFTSTEAK / MGM GRAND
tain, we move ahead with clear
purpose and focus: we will grow
your company and continue
In 2002 we also welcomed Roland
to generate returns that outstrip
Hernandez to our Board of Directors
industry norms.
and to the Audit and Diversity Com-
mittees. Mr. Hernandez is currently
the President of Hernandez Media
Ventures and was formerly CEO of
Telemundo Group.
6. BELLAGIO
Fountains of Bellagio
Picasso by Julian Serrano
Le Cirque by Sirio Maccioni
Light - The Nightclub
Bellagio Gallery of Fine Art
Conservatory & Botanical Gardens
Via Bellagio - Shopping Promenade
MGM GRAND
Studio 54 - The Nightclub
TabĂş - Ultra Lounge
Craftsteak by Tom Colicchio
NOBHILL by Michael Mina
The Lion Habitat
THE MIRAGE
Siegfried & Roy's Secret Garden
and Dolphin Habitat
White Tiger Habitat
The Volcano
The Tropical Atrium Rainforest
Shadow Creek Golf Course
Renoir by Alessandro Stratta
TREASURE ISLAND
Buccaneer Bay Pirate Battle
Mist - Lounge
Buccaneer Bay Restaurant
NEW YORK-NEW YORK
Manhattan Express Roller Coaster
ESPN Zone
Nine Fine Irishmen Pub - July 2003
Coyote Ugly Bar and Dance Saloon
Gallagher's Steakhouse
GOLDEN NUGGET
ZAX - Restaurant
Fremont Street Experience
Stefano's - Fine Dining
PRIMM VALLEY RESORTS
Primm Valley Golf Course
Fashion Outlets of Las Vegas
Desperado Roller Coaster
MGM GRAND DETROIT
Hollywood Brown Derby
BEAU RIVAGE
Coast Brewing Company
7. The power of MGM MIRAGE attractions draws
millions of visitors from the four corners of the
globe each year. Established destinations-
within-destinations like Siegfried and Roy’s
Secret Garden and Dolphin Habitat at The
Mirage continue to evolve and enrich their
legendary appeal. Elegant restaurants like
Craftsteak and sophisticated hideaways like
Tabu, the ultra lounge at MGM Grand, add to
POWER
the luster of our resorts. Hotspots like ESPN
Zone build on recognized brands. And plans for
unique venues like Nine Fine Irishmen at New
York-New York, considered the most authentic
Irish pub outside the Emerald Isle, leverage our
power to capture the imagination of guests and
keep them coming back for more.
O F AT T R A C T I O N
8. POWE
PERFORMANCE
Loaded with energy and packed with star power, the stages of MGM MIRAGE command
the spotlight in the world of entertainment. Night after night, audiences gasp at the
beauty and imagination of Cirque du Soleil’s “O” at Bellagio and Mystère at Treasure
Island. This year, a new Cirque du Soleil production will thrill even more spectators at
New York-New York. And the legendary Siegfried and Roy continue to amaze young and
old with their unique brand of magic at The Mirage. Name a premier sporting event, a
lavish stage production or a tour-de-force concert performance, and odds are it will be
playing somewhere in the world of MGM MIRAGE.
9. R
BELLAGIO
quot;Oquot; by Cirque du Soleil
MGM GRAND
Grand Garden Arena
- Rolling Stones
- Cher
- Elton John/Billy Joel
- Paul McCartney
La Femme
Hollywood Theatre
- David Copperfield
- George Carlin
- Paul Anka
- Carrot Top
Cirque du Soleil 2004
THE MIRAGE
Siegfried & Roy
Danny Gans
TREASURE ISLAND
Mystère by Cirque du Soleil
NEW YORK-NEW YORK
Cabaret Theatre
- featuring Rita Rudner
Cirque du Soleil July 2003
GOLDEN NUGGET
Spirit of the Dance
PRIMM VALLEY RESORTS
Star of the Desert Arena
- B.B. King
- Chicago
- Brooks & Dunn
BEAU RIVAGE
Beau Rivage Theatre
- Lionel Richie
- Bob Newhart
- Ann Margaret
10. Increasing our strength by attracting the best people in the business
continues to be a top priority at MGM MIRAGE. Our dynamic workforce
plays a key role in accomplishing our goal of exceptional guest relations.
PO
We welcome and celebrate the cultural differences in our employee
population, now over 43,000 strong. The power we find in their diverse
talents and backgrounds constantly re-energizes our company, leading to
growing guest satisfaction and increasing recognition for excellence.
PEOPLE
11. MGM MIRAGE
Fortune Magazine
Ranked #1 Most Admired
Gaming Company
Fortune 500
Ranked #404
BELLAGIO
AAA Five Diamond Resort
Travel and Leisure Magazine
Rated in World's 500 Best Resorts
PICASSO AT BELLAGIO
AAA Five Diamond Restaurant
THE MIRAGE
AAA Four Diamond Resort
Travel and Leisure Magazine
Rated in World's 500 Best Resorts
WER
RENOIR AT THE MIRAGE
AAA Five Diamond Restaurant
TREASURE ISLAND
AAA Four Diamond Resort
GOLDEN NUGGET, LAS VEGAS
AAA Four Diamond Resort
12. MGM MIRAGE
VOICE FOUNDATION
DOLLARS FOR DOERS
VOLUNTEER PROGRAM
EMPLOYEE EMERGENCY
RELIEF FUND
GENERAL EDUCATIONAL
DEVELOPMENT
ENGLISH AS A
SECOND LANGUAGE
CITIZENSHIP PROGRAM
COLLEGE TUITION
REIMBURSEMENT
529 COLLEGE SAVINGS PROGRAM
COMMUNITY EMPLOYMENT
OUTREACH PROGRAM
FAMILY SCHOLARSHIPS
CHILD DEVELOPMENT CENTER
DIVERSITY INITIATIVE
13. POWER TO CHANGE LIVES
43,000 caring and committed MGM MIRAGE people use their
collective and individual power to give back to the communities
in which they live and work. Hundreds of thousands of hours
have been spent by employees volunteering their time and
talents to help those in need. In 2002 we raised $2.3 million
through the employee-funded philanthropic MGM MIRAGE
Voice Foundation. $2.2 million was donated to communities
where we operate through corporate charitable giving. And
employees helped each other through the MGM MIRAGE Voice
Foundation’s Employee Emergency Relief Fund. Through their
selfless efforts and with their big hearts, MGM MIRAGE people
continue to change lives and make the world around them a
better place.
14. POW
The ability to grow from a solid foundation and the muscle to make it happen
BUILD ING
are cornerstones of the MGM MIRAGE expansion philosophy. Nowhere is this
more evident than in the creation of the magnificent Borgata Hotel, Casino and
Spa, our joint venture with Boyd Gaming opening Summer 2003 in Atlantic
City. Worldwide demand for accommodations at Bellagio, the jewel of the Las
Vegas hotel scene, has enabled us to embark upon the construction of a new
tower containing an additional 928 rooms. And spectacular new theaters to
showcase a new Cirque du Soleil production at New York-New York and another
at MGM Grand demonstrate the power to grow ahead of the curve, attracting
more new guests to our ever expanding resorts.
15. ER MGM GRAND
Turnberry Condominium
Complex
Cirque du Soleil
BORGATA HOTEL,
CASINO AND SPA
BELLAGIO
Spa Tower at Bellagio
NEW YORK-NEW YORK
Cirque du Soleil
Nine Fine Irishmen Pub
16. Joe Brunini
Gamal Aziz Al Faccinto
President
President Andre Carrier President
MGM MIRAGE
George R. Boyer III
MGM Grand Chief Operating Officer William J. Hornbuckle
MGM MIRAGE
National Marketing
President
Las Vegas Alan Feldman
Golden Nugget President
International Marketing
Jeff Dahl
MGM Grand Sr. VP Public Affairs
Laughlin MGM MIRAGE Online
President
Detroit MGM MIRAGE
Beau Rivage
POW
The power to keep MGM MIRAGE moving forward to
new levels of excellence and success rests in the
capable hands of an extraordinary team of managers.
KNOWLEDGE IS Their combined experience, knowledge, skill and talent
is unique in the industry. Individually, they are proven
leaders. Together, they are a powerhouse.
17. Cynthia Kiser-Murphey
Kenneth Rosevear
William McBeath
Sr. VP
President
President
Human Resources
Phyllis James
MGM MIRAGE
Felix D. Rappaport
The Mirage Robert V. Moon
MGM MIRAGE
Sr. VP and Sr. Counsel
Development
President
Chairman
MGM MIRAGE
New York-New York
MGM MIRAGE Marketing
William Smith Maurice Wooden
Renee West
Scott Sibella President President
Frank Visconti President Forrest Woodward
Andrew Wilson
President MGM MIRAGE Golden Nugget
President Primm Valley Resorts President
Richard A. Sturm General Manager
Treasure Island Design Group Las Vegas
MGM MIRAGE Boardwalk
President MGM Grand
Retail
MGM MIRAGE Australia
Sports/Entertainment
ER
